G.R. No. L-21878. April 30, 1971.
FOSTER WHEELER CORPORATION, petitioner-appellant, vs. SOCIAL SECURITY SYSTEM, respondent-appellee.

FACTS

Petitioner Foster Wheeler Corporation, a foreign corporation licensed to do business in the Philippines, constructed an oil refinery for Caltex from 1952 to 1954. After completing this project, it had no actual construction work in the country until March 1959, when it began a new project for Stanvac. Upon commencing the Stanvac project, the Social Security System (SSS) required petitioner to register as a compulsorily covered employer and remit premiums from March 1959.
Petitioner contested this, arguing it was not subject to compulsory coverage until it had operated for two years from March 1959. It claimed the two-year period of operation required by Section 9 of the Social Security Act must be the two years immediately preceding coverage, thus excluding its 1952-1954 operations. The SSS maintained that petitioner had already completed the required two-year period by 1954 and that the law does not require the period to be immediately preceding coverage. The Social Security Commission sustained the SSS, prompting this appeal.

ISSUE

Whether the two-year period of operation required for compulsory coverage under the Social Security Act must be the two years immediately preceding an employer’s coverage.

RULING

No. The Supreme Court affirmed the Commission’s resolution. Section 9 of the Social Security Act, as amended, states that the Commission may not compel an employer to become a member “unless he shall have been in operation for at least two years.” The law’s plain language does not qualify this period as the two years immediately preceding coverage. Interpreting the provision to require immediacy would read into the law a condition not expressed by the legislature, which the Court has no authority to do.
Petitioner’s inactivity from 1954 to 1959 did not negate its prior period of operation. In legal contemplation, it did not cease doing business but merely suspended operations, as evidenced by its valid, uncancelled SEC license from 1952 and its maintenance of a legal representative (the law firm Ross, Selph & Carrascoso) in the Philippines throughout the period. This maintenance indicated a continuous corporate intent to avail itself of the privilege to do business here. Adopting petitioner’s theory would enable mass evasion of coverage by simply suspending operations, as it would nullify prior periods of operation and require the two-year period to restart upon resumption. This would render the law ineffective.
Regarding the imposition of penalties, coverage under the Act attaches automatically once the statutory conditions exist. The employer’s duty to register arises simultaneously, and failure to do so subjects it to prescribed penalties. The Commission is not required to first issue a declaratory resolution for coverage to take effect, as such a requirement would be administratively impractical. The resolution appealed from was thus affirmed.